Free Practice Quiz Question List

4 Inventory Planning and Control Online Quiz Questions

Use this free practice quiz with 20 questions to review 4 Inventory Planning and Control, test your knowledge, and prepare for your next test or exam.

20 questions

True or false

1 point

A manufacturer holds stock between two work centers so the first can keep operating during a temporary interruption at the second. This is an example of decoupling inventory.

A
True
B
False

Choose one

1 point

A planner wants each order to match the specific requirements of the plan rather than use a fixed lot size. Which replenishment rule best fits this approach?

A
Order a fixed quantity whenever stock reaches a reorder point.
B
Plan supply to match specific requirements.
C
Review stock at fixed intervals and raise it to a target level.
D
Order when stock reaches a minimum and replenish toward a maximum.

Fill in the blank

1 point

Cycle stock covers between replenishment orders.

Written response

1 point

What inventory term describes stock that is in transit or moving through production and distribution?

Choose one

1 point

A buyer is comparing suppliers and wants to account for the amount paid for each item, applicable discounts, and inbound costs. Which inventory cost category is being assessed?

A
The cost of storage, insurance, handling, and obsolescence.
B
The administrative and transportation costs of placing and processing an order.
C
The amount paid for the item, including relevant discounts and inbound costs.
D
The consequences of insufficient stock, such as lost sales or production stoppages.

Choose all

1 point

Which practices help keep inventory records aligned with physical stock? Select all that apply.

A
Record receipts, issues, transfers, returns, and adjustments promptly.
B
Rely on an annual count and avoid investigating small discrepancies.
C
Use scanning methods to reduce manual entry errors.
D
Count selected items regularly and investigate discrepancies.

True or false

1 point

A replenishment cycle with even a small shortage counts as a stockout when calculating cycle service level. True or false?

A
True
B
False

Choose one

1 point

A company has 80 units on hand, 30 units on order, and 15 units backordered. Using $\text{inventory position} = \text{on-hand stock} + \text{on-order stock} - \text{backorders}$ , what is its inventory position?

A
65 units
B
80 units
C
95 units
D
125 units

Written response

1 point

Daily demand averages 18 units, replenishment lead time is 4 days, and safety stock is 22 units. Assuming constant average demand, calculate the reorder point using $\text{reorder point} = \text{expected lead-time demand} + \text{safety stock}$ . Give your answer in units.

Fill in the blank

1 point

Safety stock is held to buffer in demand, supply, or replenishment time.

Choose one

1 point

In a continuous-review $(Q, R)$ policy, inventory position reaches the reorder point $R$ . What does this signal?

A
It determines both the timing and fixed quantity of every order.
B
It signals when to order but does not, by itself, determine how much to order.
C
It specifies how much safety stock to hold but not when to order.
D
It sets the fixed interval at which stock must be reviewed.

Choose all

1 point

Which statements correctly describe service-level measures or their implications? Select all that apply.

A
Cycle service level measures the proportion or probability of replenishment cycles with no stockout.
B
Fill rate measures the proportion of total demand supplied immediately from available stock.
C
Cycle service level and fill rate are interchangeable names for the same measure.
D
A cycle with a small shortage is not counted as a stockout for cycle service level.
E
Raising the target service level usually reduces the safety stock required.

Choose one

1 point

A planner is using ABC classification to prioritize inventory control effort. Which approach best reflects the method?

A
Monitor every item identically because ABC classification is mainly a counting method.
B
Give C items tighter monitoring because they are generally the highest-value items.
C
Typically monitor A items more tightly while using simpler controls for lower-value C items.
D
Use ABC classification instead of assessing criticality and supply risk.

Open ended

1 point

A company is considering larger, less frequent replenishment orders to reduce the number of orders it places. Explain one potential benefit, two possible costs or risks, and how the company should balance these effects when planning inventory.

Choose one

1 point

A retailer has placed an order with a supplier, and the goods are currently being transported to its warehouse. How should this stock be classified?

A
Cycle stock
B
Pipeline inventory
C
Safety stock
D
Anticipation inventory

True or false

1 point

In a min–max replenishment policy, an order is placed when stock reaches a minimum level, with the aim of replenishing toward a maximum level.

A
True
B
False

Written response

1 point

A company is assessing the cost of capital tied up in stock, along with storage and insurance expenses. What inventory cost category covers these expenses?

Choose one

1 point

A warehouse is designing inventory controls using ABC classification. Which approach best reflects how this classification should guide attention?

A
Use the same monitoring effort for every item because ABC classification is not useful for setting priorities.
B
Monitor only A items closely and ignore criticality and supply risk for all other items.
C
Typically monitor A items more tightly, while also considering criticality, demand variability, and supply risk.
D
Use ABC classification as a substitute for tracking item and transaction accuracy.

Choose one

1 point

During one replenishment cycle, available stock meets nearly all demand, but a small portion cannot be supplied immediately. Which service measure treats that cycle as a stockout?

A
Cycle service level, because any stockout in a replenishment cycle counts as a stockout for that measure.
B
Fill rate, because it counts every cycle with any shortage as a stockout, regardless of shortage size.
C
Both measures, because they are interchangeable ways of recording stockouts.
D
Neither measure, because a small shortage does not affect service-level measures.

Written response

1 point

An item has 84 units on hand, 30 units on order, and 9 units backordered. Using inventory position = on-hand stock + on-order stock − backorders, what is the inventory position?